Updated: Feb 28
Luxemburg 2020 - Are companies sufficiently prepared for generational change?
Luxemburg, too, will see more and more "baby boomers" take retirement around the year 2020. Several thousand companies in Luxemburg will be concerned. It is not uncommon that the involved individuals are the same entrepreneurs who have been responsible for decades of successful existence and the development of company success stories. Compared to the rest of Europe, Luxemburg is above average in the number of older companies going bankrupt and that shows that only a minority of the entrepreneurs have already taken appropriate measures here. It must be a priority to put company successors in place early enough in order to secure the continued existence of companies and jobs.
“According to experience, the time needed for putting a successor in place as well as the possible corresponding adjustment of the product range and marketing strategy should be calculated as between two and five years and not just the few months that are conventionally given.” says Herbert Eberhard, CEO of Creditreform Luxemburg in Niederanven. The time is therefore pressing for those that are affected, because a lack of provision in company succession also has an impact on the motivation of both senior and junior employees who want to work in a company that has a bright future and not in a discontinued model on its way out.
There is a risk that because of a lack of prospect development, good employees move on long before the plan to handover the company even happens. On top of this, lack of planning when it comes to notification of change of ownership is also a reason for the increased drift of established companies into bankruptcy.
Often there is a potential successor among the company’s one's own executives. Timely cooperation with public authorities such as the Chamber of Commerce or Chamber of Crafts and the professional associations can also be used to prepare solutions in good time.
Competitors as well as suppliers can also be targeted in order to take the necessary measures. According to Herbert Eberhard, a credit check should naturally precede all eligible candidates, so that their current standing and professional growth can be assessed to ensure movement in the right direction.
Last but not least, for the entrepreneur the focus should be a profitable selling price that is actually attainable, which can only be achieved with a company that is well prepared for the future thanks to an above average solvency.